What is the current price of a $1,000 par value bond maturing in 9 years with a coupon rate of 8 percent, paid annually, that has a YTM of 9 percent?

Question

Quizplus · Accepted Answer

Using the bond pricing formula, the current price of the bond can be calculated as follows: 
PV = (80/1.09) + (80/1.09^2) + (80/1.09^3) + ... + (80/1.09^9) + (1000/1.09^9) 
PV = 940.44 
Therefore, the current price of the bond is $940. Since option C is the closest to this price, it is the best choice.

What Is the Current Price of a $1,000 Par Value